DND Looking for New Proponents in Offshore Patrol Vessel Project

06 April 2022

HHI 1,500-ton class OPV (image : DNV)

MANILA – The Department of National Defense (DND) is now looking for new proponents for the Philippine Navy's (PN) procurement of six offshore patrol vessels (OPVs) due to pricing issues with Australian shipbuilder Austal.

"Pending our approval of the contract for the purchase, they (Austal) said the cost has increased -- materials, labor and everything. They asked for additional payment. I think our budget is PHP30 billion, so they want PHP12 billion more for the six OPVs or they said we can reduce the number from six to five," Defense Secretary Delfin Lorenzana said on the sidelines of the rites for this year's Philippine Veterans Week at the Libingan ng Mga Bayani on Tuesday.

Lorenzana added that they cannot anymore ask the Department of Budget and Management (DBM) for additional funding.

However, he also said reducing the number of OPVs to be acquired is not an option for the PN.

"Ang gusto nila (Navy) anim talaga dahil talagang (yun) kailangan natin, so ang ginawa nila ay nakikipagusap sila ngayon sa mga ibang proponent (na) kayang tugunan without any increase in price or reducing the number of ships (What they really want is six because that is the number they need, so they are now talking with other proponents capable of giving that number without increasing the price or reducing the number of ships)," he added.

Lorenzana also said that shipbuilders from France, Sweden, South Korea's Hyundai Heavy Industries, Japan, and India have expressed interest in the PN's OPV project.

Initially, Australian shipbuilder Austal was believed to be the frontrunner in the OPV project.

Lorenzana, in earlier statements, said tapping Austal for the project will be greatly advantageous to the country as it will provide jobs to Filipinos as the company has an existing shipyard in Balamban, Cebu which it had acquired from Aboitiz.

This is aside from the transfer of technology which will also be beneficial to the Philippines in the long run, he added.

Asked if the OPV contract will be signed before President Rodrigo R. Duterte steps down on June 30, Lorenzana said this depends on certain circumstances.

"Siguro kung madidesisyunan ngayon para ma-negotiate natin yung mga price at saka provisions ng contract, maybe we can sign it before the end of the President's term, otherwise ipasa ko na lang sa susunod, sila na ang pipirma, katulad ng (ginawa) sa akin ni Secretary (Voltaire) Gazmin yung dalawang frigate, actually it was ready for signature, so sabi nya ipasa ko na lang, tapos pina-review ko, di pinirmahan ko (Maybe if we can negotiate the price and provisions in the contract, maybe we can sign it before end of the President's term. Otherwise I will just pass it to the next administration, so they will be the ones signing, like what Secretary Gazmin did on the two frigates, actually it was ready for signature, but he said I will just pass this to you, I have it reviewed and then I signed afterwards)," he said.

The OPV project is expected to replace the World War II surface assets decommissioned by the Navy.

The DBM already released the funds for the project last year. 

(PNA)